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Friday, 10 July 20
SLOW RECOVERY IN TANKER RATES TO WEIGH ON BUANA LINTAS LAUTAN - FITCH RATINGS
 Fitch Ratings believes that international tanker rates are likely improve after their sharp fall since May 2020, albeit at a slow pace. The weakness in rates may weigh on the financial profile of PT Buana Lintas Lautan Tbk (BULL, B+/Negative), which has around 15% of its fleet capacity earning revenue based on international spot rates.
The Baltic Dirty Tanker Index, which is made up from 12 Baltic international routes and mainly for crude oil shipping, has declined to below 500 points, from an average of 1,200 in March-April 2020, and is at its lowest since 2009. The index averaged 855 points in 2019 and around 770 points since 2009. Similarly, the Baltic Clean Tanker Index for refined fuel shipping has fallen to below 400 points from an average of around 1,305 points in April 2020.
The sharp fall in rates follows lower demand for global oil transportation with the OPEC+ alliance announcing in April 2020 an agreement to cut output by 9.7 million barrels per day (mbpd), or 10% of global output, from May 1. The group agreed in June to extend the production cut by one month through the end of July. The cut in output also resulted in a sharp rally in crude oil prices, with Brent price increasing to over USD40 per barrel (bbl) from around USD20/bbl near mid-April. Higher oil prices reduced the demand for floating storage and such tankers were freed, increasing spare capacity and pressuring rates.
Tanker demand has declined sharply since March-April, when Saudi Arabia increased its oil output ahead of the OPEC+ deal to cut production. The effect of increased oil output on tanker rates was compounded by the sharp fall in oil prices, which caused the futures curve to be in contango and incentivised oil storage on land and in tankers.
Demand for tankers is likely to improve from August with a reduction in the OPEC+ cuts to 7.7mbpd until the end of the 2020 and further to 5.8mbpd from January 2021. However, the output cut will continue weighing on tanker rates and improvement in rates is likely to be a gradual process.
Indonesian tanker operators PT Soechi Lines Tbk (B/Stable) and BULL benefit from largely stable rates in the domestic market, which is protected from foreign competition by cabotage laws and dominated by state-owned oil major PT Pertamina (Persero) (BBB/Stable) which is the main revenue driver.
However, BULL’s exposure to international rate volatility has increased this year. BULL had 24 of its 25 ships, or 93% of its fleet capacity, under standard time-charter contracts as of end-2019 while one tanker was part of a pool of ships managed by a pool operator and earned revenue based on international spot rates. The share of BULL’s fleet capacity managed by the pool operator has increased to 14% by end-2Q20 with three out of 33 ships being part of the pool. Additionally, BULL has two ships constituting 10% of its capacity under time-charter contracts with a base rate and upside if international spot rates are higher.
The company said it is seeking to switch the fleet under the pool operator to short-term time charter contracts of three to six months from September 2020 to limit the impact of the fall in tanker rates. Nonetheless, the Negative Outlook on BULL’s rating reflects risks to its financial profile from weak international rates, apart from sustained spending on fleet expansion. We estimate FFO gross leverage to increase to 3.8x in 2021, from 2.9x in 2020 (2019: 4.3x), due to lower international rates and EBITDA. We also assume BULL acquires five more ships for USD100 million in 2021.
Source: Fitch Ratings
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Wednesday, 09 September 20
MARKET INSIGHT - INTERMODAL
The uneventful summer lull which is coming to an end soon has left its stigma on the newbuilding market, which has already been devastated by the g ...
Saturday, 05 September 20
INDIA WON'T KICK ITS COAL HABIT SO EASILY - HINDU BUSINESS LINE
India has traditionally considered itself lucky to have been endowed with abundant coal reserves, which it has sought to use to meet its energy nee ...
Saturday, 05 September 20
FINANCING COMPLETE FOR 900MW FIFTH PHASE OF MASSIVE DUBAI SOLAR PARK: ARABIAN BUSINESS
Saudi-based ACWA Power on Thursday announced it has completed the signing of all financing agreements for the fifth phase of the Mohammed bin Rashi ...
Saturday, 05 September 20
POLISH COAL DEMAND EXPECTED TO FALL BY 7 MLN TONNES NEXT YEAR: MINISTER - REUTERS
Poland’s demand for coal is expected to fall by around 7 million tonnes next year, or more than 10% of annual hard coal production, after a d ...
Saturday, 05 September 20
PAKISTAN'S NEW 27-YEAR POWER PLAN RISKS LOCKING IN LONG-TERM OVERCAPACITY, LEAVING IMPORTED COAL AND LNG PLANTS STRANDED - IEEFA
Wind and solar, the country’s cheapest source of new generation, also overlooked
Pakistan risks locking itself into building m ...
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- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Planning Commission, India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
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